REVENUE: The services revenue index — a key industry measure – rose from 13.2 in June to 19.1.

OTHER: Labor market indicators improved this month. Employment increased and the hours worked rose, reflecting longer workweeks. Price pressures eased, while wage pressures remained the same. Company leaders were more optimistic about broader economic conditions and their own company outlook. Twenty percent of companies told the Dallas Fed that their outlook improved from June, compared with 11 percent saying it was worse.

RETAIL SALES: The Texas Retail Outlook Survey showed that the retail sales index edged down from 13.1 in June to 11.5. Inventories rose at a slightly faster pace this month.

COMMENTS: Companies in several industries — from professional services firms to durable goods wholesalers say low oil prices are hurting their business. Real estate-related companies said the residential and commercial markets are robust.

FUTURE: Services companies, including retailers, have high hopes for the future. The indexes for expectations of general business conditions and company outlooks improved for six months ahead.

Texas produces more than 11 percent of all goods made in the United States, ranking second only to California.

PRODUCTION: The production index — a key measure of statewide manufacturing conditions — rose for a second straight month but remained negative at -1.9. The index was -6.5 in June.

OTHER: Most other measures of manufacturing activity also improved this month. The new orders index jumped 11 points back into positive territory after six months of posting negative numbers. The “growth rate of new orders” index, which the Dallas Fed has said is the most accurate reflector of national economic trends, rose 11.3 points but remained negative. Shipments and capacity utilization also edged up, but remained negative.

GENERAL BUSINESS: The general business activity index rose for a second straight month, but remained negative. Company outlooks surged nearly 9 points to post its first positive reading in seven months. Manufacturers are are more optimistic looking six months ahead.

Economic activity increased in Texas and 39 other states in June, up from 35 states in May, according to data released today by the Federal Reserve Bank of Philadelphia.

Activity decreased in seven and was about the same in three states.

The index is the latest in a series of national indicators showing that the economy is generally strengthening and optimism is rising.

Over the last three months, the indexes increased in 42 states, including Texas, decreased in six and was stable in twp states. Texas was one of 23 states where economic growth was between 0.6 percent and 1 percent over the three-month period. (See map at top.)

For the entire United States, the index rose 0.2 percent in June and was up 0.7 percent over the last three months.

The Philadelphia Fed’s indexes measure economic conditions based on four indicators — employment, the unemployment rate, average manufacturing hours worked and wages/salaries (deflated by the consumer price index).

The Texas economy continues to chug along despite low oil prices and a strong dollar’s negative impact on manufacturing and exports.

Its economic growth was “moderate” during the six weeks ended July 3 as gains in the service sector offset declines in oil and other goods-producing industries, according to the “Beige Book” report released today by the Federal Reserve. Texas is the nation’s largest oil producing state and the biggest exporting state.

Overall, economic activity expanded in all 12 Fed districts across the country from late May to early July. The report for the Federal Reserve’s Dallas district reflects mainly the Texas economy since the district covers all of Texas, northern Louisiana and southern New Mexico.

Here are the top six highlights about the Dallas district from the Beige Book:

1. Oil industry woes continue

Oil and natural gas drilling declined and demand for oil field services was flat. Energy industry costs continued to fall, but some companies said “decisions to make further cuts to capital spending still loom” as they reassess their positions. Merger activity may surge in future. Smaller companies are suffering more because they have less leverage to cut costs and more difficulty accessing global capital markets.

Construction and real estate have been major drivers of the Texas job market. Just in 2014, more than $41 billion was spent in the Texas commercial real state market. (Tom Fox/The Dallas Morning News)

2. Beyond housing

The Dallas-Fort Worth area is a commercial real estate star. Retail construction reached a three-year high and demand for office space was “solid.” The Houston area saw slower leasing and increased subleasing activity. Industrial activity was strong in both the D-FW and Houston areas.

The D-FW area has the strongest apartment market, but the entire district showed higher rental and occupancy rates. Demand and rent growth was strong in the Houston area, but construction starts and rental rates for top-of-the-line space softened.

On the home front, the wet weather delayed some lot deliveries, new home starts and sales. Home builders expect to see a surge in starts for the rest of the year.

3. Manufacturing continues to slow

Most manufacturers noted steady or weaker demand; some reported layoffs.

A decline in ocean shipping volume reflects the negative effect of a strong U.S. dollar on Texas exports, such as chemicals.

Some manufacturers of construction materials reported less demand, with most blaming the wet weather and some citing the slowdown in oil field activity.

Employment in most industries either held steady or increased, especially at auto dealers, retailers, restaurants and professional and technical, financial services firms. Some fabricated metals and high-tech manufacturers reported layoffs. Some downsizing continues in the energy industry, but massive layoff announcements are mostly over.

6. Retail juggernaut

Retail sales increased overall. Retailers reported strong Mother’s Day-related sales, but said activity weakened somewhat after that due to the wet weather and the strong dollar, which reduced sales along the Mexico border. Automobile sales remained strong and demand was up from a year earlier. Most retailers were optimistic, expecting continued sales growth.

The Federal Reserve Bank of Dallas today narrowed its Texas job growth forecast for this year to about 1 percent, or roughly 120,000 new jobs, as the state’s economy continues to battle low oil prices, the strong U.S. dollar’s negative impact on exports and weaker global growth.

In April, the Dallas Fed lowered its 2015 job growth forecast for the second time — to a range of 0.5 percent to 1.5 percent, or 59,000 to 176,000 jobs.

Unlike in recent past years, the Dallas Fed’s research director Mine Yücel said Texas’ job growth may not outpace this year’s national average, which was 2.1 percent annualized as of May. She gave the new forecast in the Dallas Fed’s fifth Texas economic update video released today.

The state’s employment grew at an annualized rate of 1.1 percent as of May, compared with 3.6 percent in 2014, according to Dallas Fed data. Texas added about 52,000 jobs during the first five months of the year.

Still, Yücel noted that the Texas economy has been “quite resilient” even though the state’s employment growth has slowed due to a 50 percent plunge in oil prices — and other factors — over the last year. “We did not go into a recession,” she said.

Texas’ job growth has improved in recent months. The state’s job growth in April and May was 1.6 percent, compared with 0.7 percent for the first three months of the year, Yücel says in the 3.3-minute video.

The Texas Workforce Commission will release June employment data for the state on July 17. Payroll processor ADP today estimated that Texas added more private-sector jobs last month than in April and May combined.

During the first five months of the year, Texas saw biggest job losses in the construction, energy and manufacturing industries. However, service industries are still expanding, with many new restaurant and retail jobs. (See chart below for details.)

One unsettling trend: Many of the losses are in high-paying jobs (the average oil and gas industry hourly wage is $32) and job gains are in mid- to low-paying jobs (leisure and hospitality has the state’s lowest average wage of $14.32 an hour), Yücel noted.

Going forward, Texas will continue to face job growth headwinds of low oil prices, a strong U.S. dollar, uncertainty about Greece and the European economy and weaker growth in Asia.

Note: The numbers and percentages in the video are different from those reported by the Texas Workforce Commission and U.S. Bureau of Labor Statistics because the Dallas Fed benchmarks its data each month.

Former Dallas Fed president Richard Fisher has joined Barclays. (David Woo Dallas/Morning News)

Richard Fisher, the former president of the Federal Reserve Bank of Dallas, has returned to his investment banking roots.

Nearly four months after he retired as president of the regional Fed bank, he has been named senior advisor at Barclays, the investment bank confirmed. He starts his new job tomorrow.

Fisher began his career with the Wall Street investment firm of Brown Brothers Harriman & Co. in the 1970s and later started his own investment advisory firm and a separate funds management firm. He also was executive assistant to the U.S. Treasury secretary during the Carter administration and a deputy U.S. trade representative.

Fisher’s “exceptional knowledge and extensive experience in monetary policy, financial markets and services, global trade negotiations and regulatory matters will be of tremendous value to Barclays and to our clients,” Tom King, CEO of the investment bank at Barclays, said in a statement.

As head of the Dallas Fed for the last decade, Fisher was one of the most outspoken policymakers and critics of the financial bailouts to big Wall Street banks and of the government’s continued stimulus program. Fisher also led the “too-big-to-fail” effort, proposing to break up the biggest U.S. banks and level the playing field for smaller banks.

Barclays bought the North American operations of investment bank Lehman Brothers days after its 2008 collapse to expand is U.S. operations. That collapse led to the nation’s worst recession since the Great Depression.

Fisher also recently was named to the board of directors of AT&T and PepsiCo.

The Dallas Fed’s board of directors — with help from a search firm and an advisory group — still seeks Fisher’s replacement. The regional bank’s first vice president, Helen Holcomb, is the acting president.

REVENUE: The services revenue index — a key industry measure – rose from 3.8 in May to 13.2 in June.

OTHER: Labor market indicators reflected slower employment growth and unchanged hours worked in a week. The employment index dropped from 8.9 in May to 5.6 this month. Perceptions of general business conditions picked up somewhat, but company outlooks were unchanged.

RETAIL: The Texas Retail Outlook Survey showed that retail sales moved back into positive territory with a nearly 24-point jump. Inventories rose at a slower pace this month.

COMMENTS: Some construction, furniture and manufacturing businesses said the unusually wet weather affected their sales, but real estate, professional and restaurant companies noted that sales are up. One food service company said sales were up in June, and it plans to open more locations next year.

FUTURE: Expectations of future business conditions and service and retail company outlooks were optimistic.

PRODUCTION: The production index — a key measure of statewide manufacturing conditions — rose to -6.5 from -13.5 in May, but remained negative for the fourth straight month. It still remains among the lowest levels since fall 2009.

OTHER: Other measures of manufacturing activity in June also declined, with 11 of 15 indicators in negative territory. The “growth rate of new orders” index, which the Dallas Fed has said is the most accurate reflector of national economic trends, further contracted, falling 1.3 points to -16.5. More companies surveyed reported net layoffs (15 percent) than net hiring (14 percent).

PRICES: Prices for raw materials jumped 9 points into positive territory after five months of negative readings. Prices for finished goods improved, but remained negative for a sixth month.

COMMENTS: Two fabricated metal manufacturers told the Dallas Fed that the oil and gas slowdown appears to be stabilizing. A wood products manufacturer noted that heavy rains will hurt construction activity for the next couple of months.

GENERAL BUSINESS: Perceptions of broader business conditions and company outlooks worsened in June, but expectations for six months ahead improved.

Economic activity increased in Texas and 34 other states in May, down from 40 states in April, according to data released today by the Federal Reserve Bank of Philadelphia.

In May, the Philadelphia Fed’s “Coincident Index” decreased in 10 states and was unchanged in five states.

Over the last three months, economic activity increased in Texas and 40 other states, decreased in eight states and was the same in New Mexico. (See map above.) Texas was one of 13 states where the index average increased between 0.1 percent and 0.5 percent over the last three months.

For the United States, the index rose 0.2 percent in May and 0.7 percent over the last three months. The index is the latest in a series of national economic indicators showing mixed, but generally positive results.

The Philadelphia Fed’s indexes measure economic conditions based on four indicators — employment, the unemployment rate, average manufacturing hours worked and wages/salaries (deflated by the consumer price index).

Two Federal Reserve Bank of Dallas researchers think the worst of the Texas economic slump may be over.

“The Texas economy had a rough start in 2015, with a sharp deceleration in growth from the end of 2014,” Dallas Fed senior economist Pia Orrenius and research assistant Emily Gutierrez wrote in a new report.

We know the economy took a hit from the oil price collapse, the strong U.S. dollar’s negative impact on exports, the West Coast port strike and bad weather.

“Compared with the weak first quarter, the regional economy is looking slightly better in the second quarter,” Orrenius and Gutierrez said. “The dark clouds over the regional economy are breaking up just enough to let some rays of sunlight through.”

They note that April brought some good news for Texas: Employment edged up; the unemployment rate held steady at 4.2 percent; initial jobless claims declined for the second straight month; exports improved; and energy prices stabilized.

In addition, they say two Dallas Fed forward-looking indicators show promise. Both its Texas service revenue index and its Texas Leading Index ticked up in May.

The report comes as the May employment and unemployment updates for Texas and other states come out today. I’ll post a blog item on that later this morning.

Here are some highlights of the report:

Oil prices and rig counts

Crude oil prices have rebounded somewhat since hitting their recent lows in March.The price of West Texas Intermediate crude oil fell from over $100 a barrel last summer to around $44 in March. The price has risen in recent weeks and closed at $60.45 a barrel yesterday, but it remains about 40 percent lower than a year ago.

Although the Texas rig count continues to fall, it may be leveling off in some neighboring states. Texas is the nation’s No. 1 oil-producing state.

The service sector

In May, the Dallas Fed’s monthly surveys of over 350 manufacturing and service businesses statewide showed that service revenue grew (albeit at a slower pace), but manufacturing activity continued to decline. Many Texas manufacturers have reported being “significantly negatively affected” by lower energy prices in recent months.

Employment

Texas job growth accelerated in April, after decelerating in March, thanks largely to service industries and parts of the state with diverse economies. (See chart at top.)

The Dallas and Fort Worth areas added jobs so far this year, though at a slower pace than last year. Austin’s employment is up 4.2 percent year to date — the fastest growth among large Texas metro areas, Orrenius said.

Places with a high concentration of energy jobs and businesses have fared worse. Employment shrunk 0.4 percent year to date in the Houston area. San Antonio, which is near the Eagle Ford Shale, had two straight months of no job growth. El Paso employment has been flat.

Initial claims for unemployment benefits in most of the nation’s biggest energy-producing states, including Texas but excluding North Dakota, appear to have peaked, Orrenius said.

The energy industry has accounted for 40 percent of the increase in Texas continuing jobless claims since December, according to the Dallas Fed. Oil and gas jobs represent less than 3 percent of the state’s total employment.

Real estate

Home price appreciation should slow as the Texas economy gears down and the first interest rate hike is expected this year, but it hasn’t happened yet, Orrenius noted. She noted that metro data suggests median home prices may be on their way down in the Houston and San Antonio areas.

Statewide, housing construction activity rose in April, but apartment building may be slowing since year-to-date permits are below their 2014 monthly average, according to the Dallas Fed report.

Commercial real estate in Texas remains strong, with some softening in the Houston office market. Houston’s office vacancy rate rose in the first quarter, but remains low at 12.6 percent, according to CBRE research.